Global M&A activity rebounded forcefully in Q2

Rebound

Global M&A activity saw a strong recovery in H1 2021, as dealmaking count and value are both set to reach or surpass the record highs of previous years, according to Pitchbook's latest Global M&A report.

In total, more than 17,000 deals closed with a combined value exceeding USD2 trillion, as the bounce back from the pandemic-spurred lows in 2020 continued to pick up slack.

Healthy stock market returns, optimistic executives, and cheap financing were all contributing factors to the deal bonanza, the report, which mapped M&A activity in the first half of the year, revealed. Moreover, the intense pace of IPOs and SPAC reverse mergers bodes well for global M&A activity overall.

"The combination of cheap financing, high stock prices, and highly confident executives is a recipe for dealmaking. And that is exactly what we have seen," commented Wylie Fernyhough, senior analyst and private equity lead at Pitchbook.

"While the closed deals are on a torrid pace, announced deal activity is even hotter. Deals are being pursued in the faster-growing sectors such as technology, healthcare, and financial services as well as in some areas battered by a yearlong lockdown," he added.

On the flip side, tight labuor markets have begun to pressure industries where labour is a major cost factor. Nevertheless, in Europe deal activity increased to reach a new quarterly deal value record for the second time in a row.

Meanwhile, the second quarter experienced substantial megadeal and cross-border activity as investors based outside of Europe looked toward the area to find attractively priced opportunities, while buoyant debt and equity markets multiplied the available deal financing alternatives.

Healthy M&A activity continued in North America too. Regulatory and tax policy changes introduced by President Joe Biden in the US could negatively affect M&A activity, however, Pitchbook's Q2 M&A report stated.